Early-Season Trends Bode Well for Cedar Fair LP
Cedar Fair (NYSE: FUN) reported first-quarter results earlier this week. As is typically the case, the amusement park master limited partnership operated at a loss with the majority of its parks closed during the cold weather season. Yet early second-quarter results point toward a strong year ahead.
Cedar Fair results: The raw numbers
|
Metric |
Q1 2017 |
Q1 2016 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$48.318 billion |
$58.438 billion |
(17%) |
|
Net loss |
($64.754 million) |
($48.486 million) |
N/A |
|
Net loss per unit |
($1.16) |
($0.87) |
N/A |
Data source: Cedar Fair Q1 2017 earnings press release.
Image source: Cedar Fair.
What happened with Cedar Fair this quarter?
Net revenue fell 17% year over year to $48 million, primarily due to the shift in timing of the Easter and spring-break holidays, which occurred in the second quarter of this year compared to mostly the first quarter of 2016. Cedar Fair's revenue was also negatively impacted by a decline in first-quarter attendance due to heavy rains in California.
Operating costs and expenses were $117 million, comparable with the year-ago quarter and in line with management's expectations.
In turn, the net loss increased to $65 million, or $1.16 per limited-partner unit, compared with a net loss of $48 million, or $0.87 per unit, for the prior-year quarter.
Preliminary results
To normalize for the calendar shift, CEO Matthew Ouimet shared early-season attendance and revenue trends through the end of April during a conference call with analysts:
Ouimet also highlighted some of the strong performances of several of Cedar Fair's early opening seasonal parks:
Moreover, Ouimet noted that season pass revenue is up 10%, driven by both higher unit prices and unit sales.
Looking forward
Based on these results, Cedar Fair reiterated its goal of achieving $500 million of adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) by the end of 2017. Said Ouimet in a press release:
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Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends Cedar Fair. The Motley Fool has a disclosure policy.